MDRX Stock: Watching with Great Anticipation
Taking a look at the major market indices like the Dow Jones Industrial Average or the S&P 500, one could assume that stocks are not performing well this year. As a headline, that could be perceived as true, but it is not entirely the truth. In fact, there are a number of stocks and sectors that have gone on to push higher, making new all-time highs and refuting the notion that stocks are not performing well.
Some of the sectors currently standing out are small-cap stocks and consumer discretionary stocks. These groups in particular have pushed higher while the major market indices I mentioned earlier have not.
Small-cap stocks and consumer discretionary stocks are speculative in nature, which means they have a tendency to perform well when both the economy and the stock market are healthy. The fact that both of these sectors are outperforming is an indication suggesting that both the economy and the stock market are healthy and performing well, which bodes well for things going forward.
With this optimistic outlook of things going forward, I have decided to revisit Allscripts Healthcare Solutions Inc (NASDAQ:MDRX) stock.
Allscripts stock has been confined within an extremely large technical price pattern. This pattern has prevented the stock price from sustaining a move toward higher or lower prices. In essence, MDRX stock is trapped within this pattern.
I have been watching this pattern for a very long time because I believe that when Allscripts stock finally breaks free from the confines of this pattern, an extremely powerful move is set to follow.
Before I go into the details of why I believe such an outcome is plausible, let’s take a closer look at this extremely large technical price pattern, which is highlighted on the following Allscripts stock chart.
Chart courtesy of StockCharts.com
The absolutely massive technical price pattern highlighted on this MDRX stock chart is a symmetrical triangle.
A symmetrical triangle is created when the price action is characterized by a sequence of lower highs and higher lows.
I captured this pattern by connecting the peaks and troughs that were created by the sequence of higher lows and lower highs. This process produces two converging trend lines that not only capture the pattern but also pinpoint where significant levels of price support and price resistance reside.
This is important and pertinent information because, in order to escape this pattern, Allscripts stock needs to either break above price resistance or fall below price support. At this moment, price resistance currently resides at $15.25, and price support resides at $10.25.
Triangle price patterns are very powerful price patterns because as they develop, the range between support and price resistance continues to contract. This contraction of space causes energy to build within the pattern. The energy produced from this pattern is a result of traders positioning themselves on either side of support and resistance in anticipation of a break above resistance or a break below support.
This stored energy causes the pattern to act like a coiled spring, awaiting that fateful day when MDRX stock is finally able to escape the pattern and the energy is released.
The size and scope of the move that follows is directly related to the size of the pattern. As I said earlier, this symmetrical triangle is extremely large, maybe the biggest I have ever come across. It has been in development for over 18 years, suggesting that an extremely large move is expected to follow once MDRX stock manages to escape from it.
The good news I have to share is that the pattern is now running long in the tooth, and a resolution is expected to occur in the not-too-distant future. The reason why I believe so is because, on average, triangle patterns reach a resolution when 70% of the pattern is complete. The symmetrical triangle pattern highlighted on the Allscripts stock chart is already beyond that point, suggesting a breakout is now imminent.
I continue to watch the price action with great anticipation because the breakout that follows will be glorious.
I continue to watch the development of an extremely large technical price pattern on the Allscripts stock chart because I believe that once MDRX stock escapes from it, an extremely powerful move will follow.